CSB Bank’s net profit for the quarter ended December was largely flat year-on-year (y-o-y) at Rs 153 crore, weighed down by higher provisions and a deterioration in asset quality. On a sequential basis, net profit declined nearly 5%.
The bank also estimated an impact of Rs 522 lakh due to changes in the Labour Codes, which has been provided for in the profit and loss account. On Wednesday, the bank’s shares fell nearly 14% to Rs 431 on the NSE.
Provisions and contingencies rose sharply to Rs 87 crore from Rs 17 crore a year ago. On a quarter-on-quarter basis, provisions increased 36.3%, pushing up the credit cost to 0.69% in October-December from 0.53% in the preceding quarter.
Net interest income and other income grew more than 20% y-o-y during the quarter. However, sequentially, other income declined by around 21%. Net interest margin edged up to 3.86% in October-December from 3.81% a quarter ago, aided by a 7 basis point sequential decline in the cost of funds.
Total Business Growth
The bank’s total business rose 25% y-o-y to Rs 77,621 crore, with gross advances growing 29% and deposits increasing 21%. The gross credit-deposit ratio stood at 91.85% as on December 31.
Within gross advances, the share of gold loans increased to 51% from 45% a year ago, while the share of retail loans declined to 13% from 20%. The wholesale book’s share rose to 24% from 22% earlier. Overall disbursements during the quarter jumped 55% y-o-y to Rs 17,358 crore.
The gold loan portfolio expanded 46% y-o-y to Rs 19,020 crore, with a yield of 11.83% in Q3FY26. The loan-to-value ratio stood at 63%, while the gross NPA ratio for the portfolio was 0.25%. Even as the book expanded, the number of accounts declined to 4.16 lakh from 4.89 lakh a year ago.
Deposits and CASA
On the liabilities side, term deposits increased 26.7% y-o-y, while current account and savings account (CASA) deposits grew a modest 3.04% as on December 31. Within term deposits, the share of bulk deposits edged up to 47%, while retail deposits declined to 53%. The CASA ratio stood at 20.55%.
Asset quality weakened sequentially, with the gross non-performing asset ratio rising to 1.96% as on December 31 from 1.81% a quarter earlier. The net NPA ratio increased by 15 basis points sequentially to 0.67%.
Slippages rose sharply to Rs 197 crore in October-December from Rs 92 crore in the previous quarter. The capital adequacy ratio stood at 19.47% as on December 31.